National dairy trends taking toll on local farmers

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Posted on October 1, 2012 |

NEW HAVEN FARMER Paul Audy recently sold his herd of 90 Holsteins and retired from dairy farming. Selling the herd was the best way for Audy to keep his farm and home. Independent photo/Trent Campbell.

ADDISON COUNTY — With grain prices sky-high and milk prices dropping, a few family-owned Addison County dairy farms are closing their doors this fall.

Paul Audy of New Haven and John Roberts of Cornwall, both in their early sixties, cited a confluence of forces that prompted each of them to get out of the business they had been in for decades: the increasing financial challenges of running a medium-sized herd, the tumultuous market exacerbated by the dairy pricing regulations and the toll of working long hours for years on end.

Audy, whose New Haven dairy farm had been in operation for nearly four decades, auctioned his herd of 90 Holsteins two weeks ago.

“My biggest thing was that if I could liquidate my dairy herd and my equipment, and get enough money out of that to still live here,” said Audy, who has lived at his River Road farm for 40 years. The auction was a success, and he and his wife, Sue, will stay on their farm.

Audy has been a dairy farmer all his life. He grew up on his father’s farm in Danby, and moved to New Haven with his brother when they were young men to start a larger farm.

“I’m gonna be 61 years old pretty soon,” Audy said with a smile. “I thought it might be time to try something different.”

A tipping point came this year when dry weather in the Midwest and West hurt corn and forage crops in those regions, driving up the price of cattle feed nationwide, including in Vermont.

“I’ve been thinking about it for a few years,” said Audy, of closing his operation. “The thing that was killing me was the drought out West. The price of grain’s ungodly high.”

SMALL HERDS

There seems to be no doubt that the extreme weather conditions combined with the Great Recession have dealt a tremendous blow to dairy farmers, particularly to those whose herds are a couple hundred head or fewer. As energy and feed prices went up, particularly in the Northeast, milk prices have dropped.

“We’re seeing dairy farmers go out every month,” said Doug DiMento, the director of communications for Agri-Mark, a dairy farmer cooperative whose member farms span New England and upstate New York. “We’re signing new farmers to replace them. But the total number of farms in general is stagnant or decreasing.”

Agri-mark owns the Cabot Creamery Cooperative, to which both Audy and Roberts sold their milk exclusively.

“Dairy farms are different in New England,” DiMento said, noting that the cost of fuel and electricity in New England, as well as the cost of land, is generally higher than in other parts of the country. “The cost is higher right now than it has been in the history of dairy farming.”

Meanwhile, across the lake in upstate New York, where land and energy are generally cheaper, Agri-Mark is seeing a marked growth in young dairy farmers.

Roberts, whose herd of 165 Brown Swiss was once said to be one of the largest in the country, has planned an auction to sell his animals in November. He and his wife, Lisa, also intend to sell their 400-acre farm off South Bingham Street and move to another house in the area.

Roberts wasn’t destined to be a Vermont dairy farmer. He was born in a big city in England, where his unlikely childhood dream of working on a farm was not realized until, while studying agriculture at university, he had the idea to come to America for the summer to work on a farm. He sent off letters to four or five farms in the Northeast, offering his help. The farmer that responded to his missives was Derick Webb of Shelburne Farms.

“He had a herd of Brown Swiss that needed looking after,” Roberts recalled. “I had never heard of Brown Swiss. So, I took the job, really enjoyed myself … and,” he added, with a broad smile, “I met his daughter.”

Roberts married Lisa Webb in 1974. In 1977, they started their own farm in Cornwall, called Butterwick, where they have lived and worked for 35 years.

“I have four children,” Roberts said. “And they have wonderful careers. But they don’t want to be farmers.”

ROLLER COASTER MARKET

He and Lisa made the decision to close their farm after years of turbulence in the market place.

“Dairy farming is always stressful,” he said. “There have been a lot of fluctuations over the last 35 years. Sometimes it’s great. But the last two or three years, we’ve not only had wild fluctuations in price, we’ve had the price of energy fuel going up.”

Roberts blames the way milk is currently priced: through a complicated series of equations that elected representatives from dairy states have been trying to get changed in Washington for a long time. In the current situation, if supply outstrips demand by even a fraction, prices drop exponentially across the board, he explained. That creates a particularly difficult situation for the mom-and-pop operations typical in Vermont, which are too small to quickly adjust to market demands — they can not, for instance, slaughter large portions of their herd every time the market takes a turn for the worse.

On Sept. 24, a bipartisan group of U.S. Senators, including Vermont’s Bernie Sanders, submitted a letter to U.S. Agriculture Secretary Tim Vilsack acknowledging the difficulty that dairy farmers across the nation were facing, and requesting a review the floor price of raw milk.

“The letter demands that he investigate whether farmers can continue to stay in business at the milk price floor now set by the federal government,” Sanders said in a statement.

Right now, Roberts said, “You have a situation where a 1 percent increase in supply can lead to a 10 percent drop in the price of milk.”

That’s exactly what he remembers happening in 2009. In 30 days, he watched milk prices fall to half their normal value.

“Overnight, we had 5 percent of milk that there wasn’t a home for,” he explained. “So our price of milk dropped by 50 percent. It went from $22 per hundred to $11 per hundred.”

But of course, costs didn’t go down.

“Our cost of production is $17 per hundred,” Roberts said. “And of course, you can’t go out there and say (to the cows) ‘OK, girls — stop! We just want you to stop for two months, and then start up again.’”

He laughed.

“It’s a biological system. It doesn’t work like that.”

Audy remembered 2009 the same way. “It was a disaster year for us,” he recalled. “Now, I felt we were headed down the same road. And I just decided not to do it.”

Both Audy and Roberts expressed optimism about starting a new chapter in their lives, and both were adamant that they are not retiring in general — just ready to take on something new.

Roberts said he would love to travel. “There’s nothing definite yet,” he insisted, a twinkle in his eye. But he said he had plenty of ideas in mind.

For Audy, leaving the dairy business hasn’t been as difficult as some may assume.

“A lot of people think it’s all bad,” Audy said. “It’s not.”

He and his wife took a vacation to Florida after the auction. Upon their return, he has been keeping himself busy.

“I helped a farm last week cut some corn, next week I’m going to do some field work for them,” he said, then smiled.

“I can’t not do something, but I’d like not be tied down seven days a week. I was telling someone the other day, I’ve never had a Christmas off. I’m looking forward to this one.”